No 'Hibernation' For MicrosoftNo 'Hibernation' For Microsoft

A pivotal decision Friday in the 4-year-old antitrust case between the Justice Department and Microsoft came down in Microsoft's favor. U.S. District Court Judge Colleen Kollar-Kotelly's opinion, issued late in the afternoon, largely approved a settlement reached a year ago between the software maker and the Justice Department, which had the support of nine states. Nine other states that had been pushing for harsher measures indicated they are considering an appeal.

For the time being at least, the settlement reached last November and modified in February will govern Microsoft. The terms call for Microsoft to disclose more technical information to other developers, give PC makers more leeway in how they implement its software, and offer PC makers uniform contracts.

Speaking during a teleconference Friday evening, Microsoft chairman Bill Gates called the judge's decision a fair resolution and said his company has already taken steps to comply. "I am personally committed to full compliance," Gates said. While he said that he didn't see anything in the decision that would cause the company to appeal, Gates added, "We need to make a full assessment."

In her ruling, Kollar-Kotelly rejected proposals by the nine opposing states that Microsoft be forced to ship a stripped version of Windows absent Internet Explorer and to disclose more code in order to ensure that software built for corporate computer networks is compatible with Windows.

The judge made one change to the November 2001 settlement, however. She rejected the establishment of a technical committee chosen by Microsoft and the states that would be charged with ensuring that Microsoft complies with the agreement. Instead, she decided that a corporate-compliance committee should be appointed by Microsoft's board. Committee members couldn't be people who've worked for the company.

During a conference call Friday, attorneys general representing the dissenting states, led by Iowa, California, Massachusetts, and Connecticut, said they would study the ruling and consider an appeal. "We have this steely determination to make Microsoft comply with the law, and that hasn't changed one iota," Iowa attorney general Tom Miller said. Connecticut attorney general Richard Blumenthal said the compliance committee "will enforce accountability at the highest level of the corporation."

U.S. attorney general John Ashcroft, whose Justice Department crafted the settlement, said Kollar-Kotelly's decision "fully and effectively" addresses Microsoft's lawbreaking and restores competition in the computer industry.

Sun Microsystems issued a written statement saying that the ruling "does little" to promote competition or protect developers. "We believe that the nonsettling states have ample grounds to appeal this decision, and we hope that they do."

But Kerry Gerontianos, president of systems integrator Incremax Technologies Corp. and president of the International Association of Microsoft Certified Partners, says he's "very happy" with the decision. "Our position for a long time has been this doesn't help the industry." Gerontianos says the economy has become a bigger issue for his clients than legal wrangling over source code.

Microsoft customer Pedro Villalba, senior VP of IT and chief technology officer with HIP Health Plan of York, says his problem with Microsoft is not Windows' tightly integrated functionality--indeed, that's part of the reason the health-management organization uses the operating system. It's Microsoft's high prices that are causing HIP to take a look at Linux as an alternative.

Time has made some of the issues in the antitrust suit less relevant, Villalba says. For example, Web services now make it easier to mix and match software.